Buying any property is a big decision and requires extensive research, but buying a property at auction needs greater scrutiny and preparation. Purchasing an auctioned property has a number of benefits, aside from the chance of picking up a bargain, there is also the speed of the conveyancing and completion process and the possibility of picking up something unique and quirky which may not be available through standard estate agent routes.
So, what factors do you need to bear in mind when considering purchasing a property at auction?
Do your research and go for a viewing
Thoroughly researching the area where the property is located and discovering local house prices is vital when considering buying at auction. Talk to local estate agents and visit local shops, restaurants, and pubs to make sure that the area suits you.
You should also make sure that, where possible, you visit the property and do a thorough viewing, taking in any potential faults and flaws. You could even consider taking a local builder with you to provide an appraisal and a quote for any potential works and repairs.
If you are considering buying at auction, you should also engage an auction conveyancing solicitor to look over the Auction Legal Pack. The Legal Pack contains important information that is pertinent to the sale and includes:
- Land Registry or Title Deeds
- Results of any searches
- Special Conditions of Sale
- A Property Information Form
- A list of fixtures and fittings
- Information on the lease if it is leasehold
- An EPC
- Any existing tenancy agreements
- Details of existing or lapsed planning permission.
Have the auction property surveyed and valued
If you have spotted a property that you are interested in buying, you should then employ an RICS surveyor to survey the property and provide you with a valuation report. Many people avoid this part of the process for fear of spending money on a property that they may not end up purchasing, however a survey will alert you to potential problems, provides an account of the value of other properties in the area, and estimates the costs of any renovation work.
Having this information can then prepare you to set your bidding limit.
Sort out your finances in advance
Purchasing property at auction is extremely fast paced, with a 10% deposit required on the day, and the remaining 90% of the balance due to be paid after 28 days. With this in mind, it is imperative that you have your finances in order before attending an auction, even if that is just a mortgage in principle. Within your budget you should also allow for auctioneer’s fees, stamp duty, and conveyancing fees. We can also assist you when buying with bridging finance.
Set a bidding limit and stick to it
Auctions can be intense, high energy events, and it can be easy to get caught up in bidding. Set yourself a bidding limit in advance based on how much you value the property taking into account additional costs for renovation, and STICK TO IT.
Also, remember, in many auctions the guide price is intentionally set low to encourage bidding.
You’ve won the auction… now what?
Congratulations! You should expect to pay a 10% deposit on the day of the auction and will be asked to provide two forms of photo ID. You will also need to provide the details of your Conveyancing Solicitor.
At this point you will need to contact your mortgage provider to ensure that you have all the secured funds in place. Failure to complete the purchase after 28 days can find you in breach of contract and likely to have to forfeit your deposit and liable for further costs. When you are at the auction, make sure you take note of the required completion date, which the auctioneer will read out.
Ensure that your solicitor is experienced in auction conveyancing
As a result of the restricted time period for completion it’s vital that you ensure that your conveyancing solicitor is experienced in auction conveyancing and can work to tight time limits. Jarmans Solicitors’ Conveyancing Department are experts in all kinds of property sales and purchases and can provide you with the perfect representation to ensure your purchase goes smoothly. To talk to a member of our conveyancing team on firstname.lastname@example.org or call 01795 472291